A 44 storey tower development by Mace and Essential Living will provide 462 units of which 188 will be affordable. It will contain one of the largest number of homes for long-term private rental in the country when complete.

The Peabody Housing Trust has been appointed to manage the affordable housing element with 159 shared ownership and 29 rental units.

As well as the residential units there will also be space for a new theatre, a café and shops. There has been a long term plan for the theatre to be occupied by Southwark Playhouse which recently moved to Newington Causeway.

"This is excellent news for an area that is shaping up to be one of central London's most vibrant destinations," said Southwark Council cabinet member for regeneration Fiona Colley. "I'm really pleased to see the regeneration of Elephant and Castle gaining momentum, with work on new homes and a new leisure centre already underway.

"Over the next few years, the area will continue its transformation into a great place to live, work and visit, with the demolition of the Heygate estate, improvements to transport, and the creation of thousands of jobs, homes and central London's biggest new park. The GLA's planned development at Newington Butts, including affordable housing and a new home for the Southwark Playhouse, will be a very welcome addition to the area."

Work on the tower, designed by Rogers Stirk Harbour architects, will begin early next year with completion expected in 2017. This will be a decade after Southwark's planning committee gave the go-ahead for the scheme.

At the time the building was opposed by Lambeth Council which claimed it would dominate North Lambeth including the historic townscape of Kennington. The Royal Parks Agency warned of a detrimental effect on views from Primrose Hill and the Serpentine Bridge in Hyde Park.